Teradata Corp. (TDC) recently announced the authorization of $300 million shares under its current repurchase program bringing the total to $450 million. The new repurchase program is expected to expire on Dec 17, 2017. We believe the latest share buyback will significantly boost shareholders return, reflecting a strong balance sheet position of the company.
Previously, the company issued a $300 million share repurchase in 2012 under which it bought back 4.3 million shares. Overall, the company has repurchased 25 million shares for $835 million since the initiation of its share buyback programs.
Per the company press release, the solid investor returns signifies Teradata’s strong operating cash flow, facilitating investments as well as increasing shareholders return through buybacks. In addition, we believe its $300.0 million existing credit facility enhances liquidity which can be used for funding working capital requirements, research & development activities, capital expenditures, pension contributions and other financing requirements.
Further, the financial strength of the company is helping it to pursue strategic acquisition, thereby facilitating business growth to a large extent. The acquisitions of Revelytix (2014), Hadapt (2014), Think Big Analytics (2014), eCircle Beteiligungs GmbH (2012), Aprimo and Aster Data Systems (2011) have expanded and diversified the company’s product portfolio.
Moreover, these accretive acquisitions have boosted top-line growth. We believe that the company will continue to pursue strategic acquisitions that can be easily integrated into its existing scale of operations and also enhance the competitive position.
Stocks to Consider
Teradata currently has a Zacks Rank #3 (Hold). Better-ranked stocks in this sector include Quantum Corp. (QTM), Qumu Corp. (QUMU) and Hutchinson Technology Inc. (HTCH). While Quantum and Qumu, sport a Zacks Rank #1 (Strong Buy), Hutchinson Technology has a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment